Does IMF Financing Result in Moral Hazard?

By S. Phillips, Timothy D. Lane. Social Science Research Network, 2000

136 citations recorded by the source corpus.

The view that the IMF`s financial support gives rise to moral hazard has become increasingly prominent in policy discussions, particularly following the 1995 Mexican crisis. This paper seeks to clarify a number of conceptual issues and bring some basic empirical evidence to bear on this hypothesis. While some element of moral hazard is a logical consequence of the IMF`s financial support, such moral hazard is difficult to detect in market reactions to various IMF policy announcements and there is no evidence that such moral hazard has recently been on the rise.

Subfields: Development, Finance

View Paper: https://www.semanticscholar.org/paper/0174f81936e4dcac008a3f5660dff30beef397a6

Citations in the corpus

• Fiscal Policy and Financial Markets (2008, unknown): “Similarly, Lane and Phillips (2000) investigate the reactions of bond spreads to three categories of events: (i) announcement of new IMF-supported programs in countries undergoing financial crises; (ii) news about Fund’s financial resources or commitments to individual members; and (iii) news…”